Most bike taxi services have shut operations in India

While only a few states provide for commercial bike-taxi licenses, the lack of clarity on regulations is not the only reason for these failures.Anand J | TNN | March 23, 2017, 09:13 IST

Bike taxis are popular in Indonesia and Thailand, where they weave through traffic jams to get people around in a fraction of the time a cab takes.

But in India, bike taxis are finding it tough. Most of the players in major markets like Bengaluru and Gurugram, that started over the past few years, have shut down.

While only a few states provide for commercial bike-taxi licenses, the lack of clarity on regulations is not the only reason for these failures.

The poorly funded local players have not been able to match the heavy subsidies to customers and drivers by players like Uber and Ola, which makes them unattractive to both segments.

Also, the market itself does not appear to be growing rapidly , probably the reason why Uber and Ola too do not seem to be taking the segment seriously .

Haryana provides a commercial bike taxi license, but most players in the state including Yaya, Dot, TuWheelz, Rideji, have stopped operations. Bikxie and Mtaxi have shifted focus to deliveries.

Baxi, founded in November 2015 by Manu Rana and Ashutosh Johri, looks to be among the last ones standing. In Bengaluru, companies like Headlyt, Heybob, and Zingo have shut down.Even Uber has gone cold in cities like Ahmedabad and Hyderabad, where it launched bike services with great fanfare.

“We were not able to make progress with regulators for appropriate regulations. We continue to have conversations and whenever the time is right, we will relaunch bikes,“ Uber India president Amit Jain told TOI. He added that the company plans for a relaunch in Bengaluru soon.

Heybob founder Vishal BM told TOI soon after the venture closed that they tried moving from a consumer business to a business-to-business model. “But it was too late, as we ran out of cash. With investor sentiments down, we were helpless,“ he said.

Baxi has raised Rs 9 crore from Dalmia Group and angel investors. Baxi has more than 600 bikes on its platform in Gurugram and Faridabad. It is now looking to expand to 40 cities in Uttar Pradesh.

“We were never focused on app bookings and were available at bike taxi stands and metro stations too. We are already operationally profitable and are looking to make net profits soon,“ said Rohit Koshy , entrepreneur-in-residence at Baxi.

The new draft regulation on bike taxis by the central government is giving hope to the startups. Since December, Telangana, Rajasthan and UP have approved commercial bike taxis.

“The recent interest shown by state governments will revive investor interest. We will need 12-18 months before we can achieve Uber-like efficiency in bike taxi operations,“ said Aravind Sanka, founder of Rapido.

The company has 4,000 bikes in Bengaluru running on its ride sharing platform, and another 1,000 in Gurugram running as ride shares as well as taxis. It does 3,500 rides a day and says it has grown by four times in the past year.

A bike taxi's operational cost is Rs 1.7km. Sanka said if they charge customers Rs 8 km for rides of around 5 km, they will be very competitive compared with autos and be able to build a sustainable business. Current rates for a 5-km ride stand at about Rs 7-8 per km, including base fare and, in some cases, per-minute charges, in cities such as Bengaluru and Gurugram.